Big Shopping Centers continues to implement a strategy to sell all of its U.S. assets. Today, the company reported signing agreements to sell two U.S. properties for $ 114 million, following the launch of another deal to sell a property there earlier this month.
Big , Managed by CEO Chai Gallis, operates in the US through an American subsidiary, in which Big holds 80% of its shares. Today Big reported that the American subsidiary has entered into two binding contracts for the sale of two properties at prices higher than the book values.
Under the first contract, the U.S. subsidiary will sell its entire holdings (100%) at the Sunset Esplanade open-air shopping center in Hillsborough, Oregon. 2,000 sqm.
In exchange for the purchase of the shopping center, the buyer will pay a sum of $ 68.4 million, with the value of the property in the company’s books standing at $ 63 million. The consideration for the transaction reflects a discount rate of approximately 6% on NOI (net operating income) of approximately $ 4.1 million, which the shopping center is expected to present in 2022 (including the expected NOI from the additional contract).
The shopping center in Oregon covers an area of about 25,000 square meters and enjoys an occupancy rate of 91.2%. If the lease is signed with the additional tenant, the occupancy rate in the property will increase to 99%.
In respect of the property, there is a loan in the amount of approximately $ 32.6 million, which will be paid in the name of the purchaser upon completion of the transaction. According to Big, if the lease is not signed, the buyer will have the option to complete the transaction in exchange for a lower amount of $ 65.9 million.
The second transaction includes the sale of the subsidiary’s full holdings (80%) of the Greenway Station Open Shopping Center in Middleton, Wisconsin. The sale price for 100% of the rights in the shopping center is $ 46 million, while the value of the property in the company’s books is $ 42 million.
The subsidiary’s share in the sale of the rights is approximately $ 36.8 million. The return reflects a discount rate of approximately 7% on NOI expected for 2022 of approximately $ 3.2 million.
The Greenway Station shopping center includes an area for rent of 27.1 thousand square meters and has an occupancy rate of approximately 83%. The property has a loan of approximately $ 30.3 million, which will be repaid at the time of the completion of the transaction.
Completed sale of 7 properties so far
According to Big, the two contracts are subject to due diligence that the buyers have begun to perform and there is no certainty about the completion of the transactions. Earlier this month, Big reported that its U.S. subsidiary had completed the sale of its entire holding (100%) at the Village Palomar Open Shopping Center in Temecula, California, to an American Reit fund.
The sale price for 100% of the rights is $ 32.5 million, with the value of the property in the company’s books standing at $ 32 million. The return reflects a discount rate of approximately 6.15% on NOI expected for 2022 of approximately $ 2.0 million.
The center in California includes an area for rent of 11.6 thousand square meters and has a total occupancy rate of 95.6%. There is no loan against the property, so the cash flow resulting from the subsidiary from the sale (before related costs) amounts to $ 32.5 million.
According to Big, it currently owns 17 $ 530 million book properties in the U.S., which have not yet been sold and for which a sale agreement has not yet been signed. So far, Big has completed the sale of 7 properties for $ 231 million and owns 5 more properties. For which $ 123 million in sales agreements were signed.
Thus, 40% of Big’s assets in the US have already been sold or are nearing completion. Big is currently traded on the stock exchange at a company value of NIS 9.85 billion, after its share has climbed 32% since the beginning of 2021.